The Malthusian Theory of Economic Growth

The Malthusian theory of economic growth is a theory of population growth and economic growth that is largely supported by countries with booming populations. However, the Malthusian theory is not universally supported, and there are some examples of countries where it does not apply. These countries include East Africa, which was affected by rapid population growth. The Rwandan Genocide, according to author Jared Diamond, was the result of population growth and illustrates Malthus' worst-case scenario. The lagging technological advances of the region meant that food production could not keep up with the booming population.

Principles of nonstable population dynamics

In the eighteenth century, Thomas Malthus recognized that the human population would multiply if resources were not scarce. However, he added a wrinkle to the equation by studying the effects of population growth in areas with scarce resources, such as land. The law of diminishing returns emerged from Malthus's research, and its relevance is evident even today.

The principles behind Malthus's theory have been proven time again throughout history. For instance, an increase in income increases the population through the increase in marriage and births. Likewise, higher income reduces mortality, including deaths caused by malnutrition. But the increase in the population is a reaction to decreasing marginal productivity. According to Marx, the relative overpopulation of capitalist societies is not caused by decreasing marginal productivity but rather by the accumulation of capital.

Predictions of a zero-sum game

The Malthusian theory of economic growth is a common misconception. This theory is based on the concept of a "zero-sum game," which states that for every winner there must be a loser. Since the industrial revolution, Westerners have learned to live outside of this logic. It is a theory that was first put forward by Thomas R. Malthus, who wrote a book called An Essay on the Principle of Population. In fact, Malthus' book was so influential that even Thomas Jefferson sent a copy to his favorite economist.

While the Malthusian theory of economic growth makes for a gloomy picture, it isn't without some positive aspects. In a zero-sum economy, the population of a country can grow only as fast as the production of that country's goods. And if the population grows faster than the economy can produce food, there will be a food shortage.

Effects of increasing returns on economic growth

In the Western economy, there is a shift from focusing on bulk-material manufacturing to utilizing information, design, and technology. With this shift, the mechanisms that determine economic behavior are changing from diminishing to increasing returns. These two forces are related to each other. These shifts in economic behavior have profound consequences for both the development and success of countries.

Increasing returns in economies are the result of competition among firms. As a result, the size of the market is a crucial determinant of the ability to generate increasing returns. Thus, the larger a market is, the more likely an economy is to enjoy higher economic growth.

Criticism of Malthusianism

The critics of Malthusianism point out that the economic theory places too much emphasis on population and food supplies. They claim that the population problem is not just one of size but also of efficient production and equitable distribution. They also contend that the Malthusian Theory of Population is pessimistic and threatens humankind with misery.

Godwin, in particular, criticized Malthus for his underlying belief that moral restraint had no significance in past times. He noted that the British government was in a Malthusian mindset during the potato famine of the 1840s, which was intended to decrease the population surplus.